E.U. tariffs set to raise pasta and wine prices, threatening jobs on both sides of the Atlantic

NBC News

a day ago

Europe is sounding the alarm: Tariffs could soon be hitting wallets of people in the United States.
The 30% tariffs on European Union imports, announced by President Donald Trump on Saturday, could be a 'death blow' to the European food industry and lead to price hikes for American consumers, the Italian winemakers association UIV said. 'The 30% tariff on wine … would be virtually an embargo on 80% of Italian wine,' the group added, according to a translated statement.
Coldiretti, an association that represents European agricultural companies, said American consumers would likely face shortages or see price hikes for imported wine, cheese and pastas.
And German industry association BDI called the escalation 'incomprehensible,' warning that it threatened jobs and investment worldwide. Germany is the top E.U. exporter to the U.S.
Cars and other vehicles produced in the E.U. could also face increased prices. "The costs for our companies have already reached the billions—and with each passing day, the total continues to grow," the German auto trade group VDA told NBC News in a statement Monday.
Those statements come after Trump sent a letter to the E.U. (and a separate one to Mexico) on Saturday threatening a blanket 30% tariff on goods shipped to the U.S. starting Aug. 1, an indication that ongoing trade negotiations have failed. After initially backing down from his 'Liberation Day' tariffs and promising trade deals with dozens of countries, Trump has steadily returned to his trade war posture, sending letters to countries around the world with ultimatums and tariff rates from 20% to 40%.
President Emmanuel Macron of France, a key source of U.S. food and wine exports, said Saturday he strongly disapproved of the 30% tariff and urged the E.U. to speed up 'the preparation of credible countermeasures.' He said trading partners such as the U.S. and Europe 'owe each other' respect.
In 2024, the U.S. was the top destination for E.U. exports. The top exported products from the E.U. to the U.S. last year were medical and pharmaceutical products, medicines, motor vehicles and machinery, according to Eurostat.
Trump has threatened sector-specific tariffs on pharmaceutical products, although it's not clear when those might be unveiled.
Ireland's deputy prime minister and foreign minister Simon Harris, one of the first E.U. leaders to react to Trump's Saturday letter, said 'there is no necessity to escalate the situation.' Harris said he planned to meet with the U.S. ambassador to Ireland on Monday to discuss the situation.
Ireland is the top source of U.S. pharma imports from the E.U., and serves as the European headquarters of Apple, Google, Microsoft and Meta.
Speaking in Brussels on Monday after a meeting of E.U. trade ministers, the European Commission's top trade negotiator, Maros Šefčovič, said the 30% tariff 'is absolutely unacceptable. That is the level which is absolutely prohibitive to any trade.'
Last year, the total value of E.U.-U.S. trade amounted to nearly $2 trillion.
Some are still expressing hope for a deal.
'The clear impression was that we were very, very close in agreement in principle,' Denmark's foreign minister said Monday after the trade ministers meeting. 'Unfortunately, it wasn't possible due to this presidential letter, but it is still our major vision that we should reach an agreement, but we also want to send signal that it must be a fair deal for everybody.'
For its part, the E.U. has delayed any countermeasures — or retaliatory tariffs against the U.S. — but it currently has more than $100 billion of retaliatory tariffs on standby.
Some of that retaliation targets goods and produce from politically sensitive U.S. states, such as soybeans from House Speaker Mike Johnson's home state of Louisiana or bourbon from Kentucky. Other retaliatory tariffs could target Boeing planes and U.S.-built vehicles.
The American Chamber of Commerce in the E.U. said it was 'concerned' about the tariffs that it said would 'generate damaging ripple effects across all sectors of the EU and US economies.' The group added that 'tariffs disrupt supply chains and add costs and complexity for businesses on both sides of the Atlantic.'
Despite the major escalation, Šefčovič said that he planned to speak with his American counterparts, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, on Monday to keep negotiations going.